Rubin quits Ford's board amid turnaround

Resignation could signal major changes ahead for automaker

PadraicCassidy

NEW YORK (MarketWatch) -- Citigroup Inc. senior executive Robert Rubin resigned his seat on the Ford Motor Co. board of directors this week in a move that could signal big changes ahead for the automaker, including the potential for a major asset sale.

Staying on the board "could raise a question whether my relationship with Ford
F, -0.28%
and Citigroup
C, +0.71%
creates an appearance of conflict," said Rubin, the former Goldman Sachs executive who served as Treasury secretary from 1995 to 1999.

No conflict currently exists, he explained in a letter to CEO Bill Ford on Thursday, but he took note of the multifaceted relationship that exists between Ford and Citigroup. Rubin joined Ford's board in 2000.

Shares of Ford rose 3.1% to close at $8 on Friday as Wall Street continued to digest a whirlwind of speculation on what Ford will do next. The stock was by far the most active on the New York exchange with more than 38 million shares changing hands, easily topping the average daily volume of about 33 million.

Glenn Reynolds, analyst at CreditSights, said all signs point to a major announcement coming down the pipeline.

"Mr. Rubin would not resign over the potential for just a modest asset sale," he said. "The speculation will be that Citi and most of the major banks will putting together industrial-sized pitch books and looking at their roles in bigger potential deals."

In a separate development supporting Reynolds' take, Bloomberg News reported that Jacques Nasser, a former Ford CEO, is leading an investment group that is considering buying some of Ford's luxury-car brands, including Jaguar and Land Rover.

A day earlier, Ford's stock rallied on a report that members of the Ford family have been mulling the possibility of taking the company private, which would pave the way for Bill Ford and his inner circle to retool the struggling automaker without having to take shareholders' interests into account. See full story.

Plunging sales, particularly among trucks and SUVs, has Ford tinkering with its "Way Forward" plan, which it laid out in January with the intention of slashing up to 30,000 jobs and closing 14 North American factories by 2012.

An update, expected to follow a board meeting on Sept. 14, could include white-collar cuts and additional plant closures. See full story.

In the meantime, Ford slashed its fourth-quarter production plans by a surprising 21% in response to the flagging U.S. sales.

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